A recent Department of Labor Advisory Opinion (Ad Op 2009-03A) discussed the effect of certain language that is often found in brokerage agreements that could be used in connection with Individual Retirement Accounts offered by brokerage firms. The Department advised that the language in question would result a series of "prohibited transactions," which would have the effect of invalidating the customer's IRA.

In the case described in the Opinion, a customer had both personal and IRA accounts with the same brokerage firm. In establishing the IRA account, the customer was asked to sign an agreement containing the following paragraphs...